Just a few short years ago, the oil and gas industry was living in an era defined by $100 per barrel oil prices. But history has a habit of repeating itself and, as with the 1980s and late noughties, 2014 saw oil prices plummet, plunging the sector into one of the deepest downturns experienced to date.
What has followed has unquestionably been a challenging time. While not unprecedented, the scale and longevity of this most recent slump has greatly sharpened the focus of our industry – operators and the supply chain alike – on how to operate more efficiently, effectively and, ultimately, become more sustainable.
Without a doubt, cost reduction has been a top priority but, in parallel, we’ve also had to consider the longer-term outlook and how to become more resilient in order to manage through – and even benefit from – future volatility.
Technology breakthroughs, collaboration and innovative new business models are all key considerations, especially when you consider that 80% of respondents to a recent survey from Wood Mackenzie agreed that oil prices will be in the USD 50-60/bbl range this year. We have all had to look at different ways to make projects more viable at lower breakevens.
If you consider technology specifically, we have seen an increase in the popularity of reconditioned parts and machines. And why not?
Reusing the ‘old’ comes with a number of benefits that are both environmentally and economically sustainable.
“Recycling spare parts and machines isn’t the answer to everything, but in some cases it can be the right approach.”
Take GE Oil & Gas’ Used Serviceable Materials (USM) solution as an example. By completely refurbishing original GE components fit for reuse, you don’t just benefit from a more cost-effective solution – we can also deliver them faster, with an inventory of specific parts and units already available.
Of course this isn’t the answer to everything. We must not forget the deep-rooted innovation that has driven our industry forward – making it crucial that, together, we continue to find the right balance between reusing the old and creating groundbreaking new solutions.
The big question is how best to do this?